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Spanish decree makes it easier for Catalan firms to leave

Urgent Spanish government measure to facilitate decision by firms to relocate HQs causes “concern” in Catalonia

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06 October 2017 05:20 PM

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ACN | Barcelona

With a number of major companies looking to move their headquarters out of Catalonia, the Spanish government has urgently passed a decree facilitating the relocation of Catalan firms. Spanish economy minister, Luis de Guindos, told a news conference on Friday that the decree ensures that the decision to relocate legal HQs can be made by the board of directors, without consulting shareholders, unless the company rules specifically prevent it.

Banc Sabadell took the decision to relocate its HQ to Alacant on Thursday, with Spain’s third-largest bank, Caixabank, meeting on Friday afternoon to discuss moving its headquarters to Palma de Mallorca. Gas Natural also moved its legal HQ from Barcelona to Madrid. Other large Catalan companies, such as Freixenet and Abertis are also looking into moving in response to the current political uncertainty.

Yet, the Catalan government accuses the Spanish executive of putting pressure on Caixabank and Banc Sabadell to relocate outside of Catalonia. Vice president and economy minister, Oriol Junqueras, told Catalunya Ràdio on Friday that the urgent passing of the decree was proof. Junqueras also said that the relocation of banks to Alacant and Palma, which are relatively close by, shows it is a “temporary decision”. The minister also played down the importance of the decisions, as he argued that in a globalized world “clients use banks from all over the world.”

Independence a “catastrophe”

Nevertheless, some of the biggest names in Catalan business have announced they are looking into relocating. Cava producer Freixenet says it will relocate its HQ should independence be declared. Company chairman, Josep Lluis Bonet, told the RNE radio station that a unilateral declaration of independence would be a “catastrophe” for Catalonia, Spain and Europe. Meanwhile, Catalonia’s other major cava producer, Codorniu, said it will analyze the risk posed by a possible declaration of independence. Talking to ACN, the company said that while the decision to relocate outside Catalonia would be difficult, the group has “a business responsibility” to look into it.

Apart from banks and cava producers, two of Catalonia’s largest multinational companies, Gas Natural and Abertis, are also considering relocating their HQs. In fact, the first one already confirmed it will. Abertis, which manages motorways in Catalonia, has a turnover of some 17.1 billion euros, while Gas Natural’s market value currently stands at 18.4 billion euros. An internal memo from Catalana Occident also suggests that the insurance firm is looking into the option of relocating.

“Concern” over relocation decisions

The rash of announcements in the past couple of days from companies thinking of relocating HQs has unsettled many in Catalonia. The CCOO trade union, for example, expressed its “concern” in a statement on Friday, which also rejected the Spanish government’s decree facilitating relocation. The union also called on business associations and companies to “be active in the negotiation of future scenarios for Catalonia” and to support “the various initiatives for dialogue” that have been put forward.

Some of the strongest reactions have come from local authorities. The Sant Julià de Vilatorta town hall, in Osona, withdrew 350,000 euros of municipal funds from its Banc Sabadell account, depositing the money with another institution. The decision came a day after the local authority in Gironella (Berguedà) similarly withdrew 300,000 euros. The “protest measure” said mayor, Joan Carles Rodríguez, was taken to point out that “the future of Catalonia will be decided by the people and not the banks.” Meanwhile, the Celrà town hall, in Gironès, entirely emptied its four Banc Sabadell accounts, a total of 2.7 million euros. Mayor Dani Cornellà called on other local authorities to follow the example of his town hall.

Minister warns of a “spiral of boycotts”

However, Catalan business and knowledge minister, Santi Vila, discouraged local authorities from withdrawing their money from banks that have decided to relocate, so as to avoid a “spiral of boycotts” that will be “harmful” to the economy. Talking to the RAC 1 radio station, Vila had a message of calm and defended the right of private companies to take whatever “decision they believe opportune”. He also reminded listeners that the relocations referred only to legal HQs, and that none of the companies would be moving their facilities or employees out of the country.

The minister’s composure over the relocation issue was reflected by the Official Association of Commercial Agents of Barcelona (COACB), which said that the “tension experienced in Catalonia in recent days” had not affected sales. In a statement, the association said it expected things to continue this way, as “professionals and businesses have stayed on the sidelines” of the conflict while “the sales activity of almost 80% of Catalan members is carried out abroad.”